December 23, 2025 09:56 PM GMT US Economics | North America What's going on, part 2? Firms are pushing price to recover tariff costs The Q3 US GDP report indicates firms took a significant step towards recovering the costs of tariffs by pushing output prices higher. This should mean less downside risk to the labor market and lower recession probabilities, supporting our outlook for a rebound in growth in 2026. Key Takeaways Exhibit 1: Price, cost, and profit per unit of real gross value added on nonfinancia ...

Financial Data and Key Metrics Changes - The financial strength rating of Erie Insurance Group was adjusted from A-plus superior to A-excellent by AM Best, reflecting profitability challenges due to large underwriting losses from severe weather events and increased claim severity [4] - Net income for Q3 2025 was $183 million, or $3.50 per diluted share, a 14% increase from $160 million, or $3.06 per share in Q3 2024 [9] - Year-to-date net income reached $496 million, or $9.48 per diluted share, an 11% increase compared to $448 million, or $8.57 per diluted share in the first nine months of 2024 [9] - The combined ratio improved to 100.6% in Q3 2025 from 113.7% in Q3 2024, indicating progress towards profitability [8] Business Line Data and Key Metrics Changes - Direct written premiums for the exchange grew 7.6% in Q3 and 10.1% year-to-date, with an average premium per policy increasing by 10.7% [7] - Policyholder surplus increased by over $300 million for the year, totaling $9.6 billion, demonstrating a strong capital position [9] - Management fee revenue from policy issuance and renewal services rose 7.3% to $825 million for the quarter and 9.5% to $2.4 billion for the year [10] Market Data and Key Metrics Changes - The company faced elevated underwriting losses due to severe weather-related events in 2023 and 2024, which were nearly double historical levels [5] - A significant hailstorm in 2025 caused $370 million in insured losses, marking the largest weather event in the company's history [5] Company Strategy and Development Direction - The company is introducing an enhanced auto product, Erie Secure Auto, aimed at improving competitive positioning and growth potential [12] - The focus remains on strengthening profitability, delivering exceptional service, and investing in technology and products for future growth [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by inflation and weather volatility over the past few years but expressed confidence in actions taken to restore profitability [6] - The company highlighted its commitment to service, which has been recognized by industry accolades, including high customer satisfaction ratings [13] Other Important Information - The company has paid over $190 million in dividends to shareholders in the first nine months of 2025, reflecting strong financial performance [11] - Erie Insurance received multiple recognitions, including being ranked first in small business insurance customer satisfaction and named one of America's Best Insurance Companies [13][14] Summary of Q&A Session Questions and Answers - There was no Q&A session following the earnings call, as the discussion was pre-recorded [1]